Latest news with #BerryEveritt
IOL News
08-07-2025
- Business
- IOL News
How the US's 30% tariff on South African goods could impact property prices
South Africa's real estate sector is expected to feel the effects of the US tariff decision for at least a few months while the country's businesses adapt. On the other hand, it could also create exceptional opportunities for astute real estate buyers and investors, according to Berry Everitt, the CEO of the Chas Everitt International Property Group. If South Africa is unable to significantly increase its exports to other countries, the United States' 30% tariff on all the country's imported goods could set back the local property market. He noted that the new tariff level will make SA goods more expensive and thus less attractive for US consumers to buy "and so is likely to cause a drop in demand that will have repercussions not only for the South African exporting companies and their employees but also for the broader economy and the real estate market". The international property group said the US is currently SA's second-biggest bilateral trading partner, with total goods trade amounting to $20.5bn in 2024. South African exports to the US were valued at $14.7bn, while imports stood at $5.8bn. This resulted in a trade deficit of $8.8bn for the US, which US President Donald Trump regarded as untenable. This was made clear in a letter he sent to SA President Cyril Ramaphosa on Monday, which also warned that if SA were to respond by raising its tariffs on US imports, the amount of that increase would be added to the 30%. "The new tariff level threatens key export sectors, notably automotive, agriculture and mining, all of which are major employers, and initial projections are that this move will immediately reduce South Africa's economic growth by around 0.3 percentage points," says Everitt. "In addition, the decision has already weakened the Rand, which will make it more expensive for SA to import certain things that it needs, such as fuel. This will push up prices and inflation for SA consumers and lessen the chance of future interest rate cuts." However, he points out that many SA exporters are already exploring alternative markets, leveraging agreements like the African Continental Free Trade Area (AfCFTA) to bolster intra-African trade and reduce dependency on the US market. He said SA's membership of the BRICS+ trade group, which is currently meeting in Brazil, may also assist local exporters in finding large new markets, especially in China, South East Asia and the UAE, to offset the US trade they lose. And China, for example, announced last month that it was removing all tariffs on imports from the 53 African nations with which it has diplomatic ties, a move that will make SA products cheaper, and more attractive, to Chinese consumers. "Meanwhile, we do expect the real estate sector to feel the effects of the US tariff decision for at least a few months while SA businesses adapt. There could be job losses in the export-driven industries, and the banks are likely to be more cautious about approving home loans," Everitt said. He said this will slow demand for both residential and commercial properties and cause many investors and developers to press pause on new projects. "The other side of this coin, though, is that property price growth will stabilise for a period and create opportunities for those who have a positive view of SA's longer-term future, as we have, to negotiate with sellers and buy at prices that will prove to be highly advantageous. "What is more, we believe many buyers will soon find the real estate market one of the better places to invest as stock markets around the world become more volatile in response to the shifting US tariff scenario. "As a member of Leading Real Estate Companies of the World, we have seen how similar scenarios play out in other countries, and are able to provide sound advice to both buyers and investors seeking to maximise the opportunities now developing in the SA market," Everitt said.
The Citizen
30-05-2025
- Business
- The Citizen
Rate cut another boost for rising property market
With the inflation rate still below 3% and the Rand stronger against the US Dollar, the Monetary Policy Committee of the Reserve Bank has decided to lower the repo rate by 0,25% to 7,25%. This is the fourth interest rate cut since September 2024 and will take the prime rate and home loan 'base rate' to 10,75%, compared to 11,75% a year ago, notes Berry Everitt, CEO of the Chas Everitt International property group, and will cut the cost of borrowing by around R17 per R100 000. 'This means that on the R1,6m average home price noted in the May BetterBond Property Brief, the minimum monthly bond repayment will drop by R272, making it easier for prospective buyers to qualify for new home loans. 'And for existing homeowners with 20-year bonds at that level, their monthly repayments will now be almost R1100 lower than at this time last year.' The news for first-time buyers is even better, he says, with the minimum monthly repayment on the average first-time buyer home price of R1,28m dropping by R218 and the gross monthly income required to qualify for a 20-year loan of that amount falling by more than R700. 'In addition, the banks have been easing deposit requirements in recent months and the average deposit for first-time buyers is currently almost 9% lower, at R175 000, than it was at this time last year. Coming on top of the Budget decisions to raise the Transfer Duty threshold to R1,2m and not to raise VAT, this means that first-time buyers now require a lot less cash to become homeowners.' Everitt says this is already being reflected in the market, with BetterBond recording a 2,2% year-on-year increase in home loan applications in April, 'which represents a huge comeback from the 15% year-on-year decline recorded in April 2024'. Today's MPC decision follows news released by StatsSA that the inflation rate in April was 2,8%, still under the Bank's current target range of 3 to 6%, despite large electricity tariff increases and higher food prices in recent months. Reserve Bank governor Lesetja Kganyago noted that inflation was also expected to remain lower than initially expected this year largely due to lower oil prices, a stronger Rand/dollar exchange rate and the decision not to raise VAT. On the other hand, economic growth projections are lower and unemployment is higher worldwide, so there is a need to lower rates to stimulate spending, company revenues and employment. Many other central banks have already cut rates in response to this situation, and the US Federal Reserve is also expected to start doing so at its next meeting. Issued by Chas Everitt International
